There’s something special about finally being able to buy your first home. There’s no more need for apartments and renting is about to become a thing of the past. Home ownership is more than just a step in life, it’s a mark that you’ve truly arrived as an adult. It’s part of the American dream.
While home ownership used to be taken for granted, buying your first home now can be quite difficult. Depending on where you live, it’s possible that financial restrictions may make buying your first home more difficult. As a consequence, the average age of people buying their first home continues to rise. As a counter to this trend, there are programs and credits that can make buying your first home more manageable. Additionally, getting your first mortgage is now easier than ever. With all of these assists, you can be in your first home in no time!
First Time Home Buyers Programs
Considering it can be tricky to get your first home, there are many programs that work to try to help out first time buyers. They may make you more appealing to banks, or they can directly assist. Here are some of the first time buyers programs you could potentially qualify for:
- FHA Loan - This loan is insured by the Federal Housing Administration. Banks won’t take a loss if you default on this mortgage, so they are willing to give them with small down payments like 3.5%.
- VA Loan - If you’re an active military member, a veteran or a spouse of a deceased military member, you can qualify for a VA loan. These loans don’t require mortgage insurance and a credit score isn’t important. In many cases, VA loans don’t require any down payment.
- Energy-efficient Mortgage - For people who want to improve their home, but can’t afford the renovations right away, these mortgages offer up the money for the improvements from the start. This means your first home can be perfectly energy efficient and save you on all of your bills right away.
Tax Credits
There are many tax credits that purchasing your first home will trigger. It’s an important thing get these credits. When you mortgage a home, the most expensive time is during the initial aspects of the mortgage. Here’s some of the tax credits you should be using:
- Home Mortgage Interest Deduction - This is the big one. Interest fees are the highest in the early stages of the mortgage. These are eligible on homes that cost up to $1,000,000. This reduces your taxable income.
- Mortgage Interest Credit - Similar to the previous credit, this deals with the interest you pay. However instead of reducing your taxable income, it can reduce your taxes owed.
- Property Tax Deduction - Did you know you can deduct your property taxes? You certainly can. These are a large deduction.
- Home Improvement and Home Energy Tax Credits - If you are working to improve your home and make it a more modern and energy efficient home, there are options for you. Specifically, the residential energy property tax credit is work 30% of the installation costs of renewable energy sources like solar panels.
Getting Your First Mortgage
Once you’ve decided it’s time to find your home, it’s time to set up your mortgage. Mortgages are one of those things that seem simple, but can be very complex if you don’t research everything. When you know you are planning to purchase a home in the near future, you can get pre-approved for a mortgage. This way you will know the maximum amount that you can spend before you do your purchasing.
The good thing about mortgages is that there are a lot of people willing to assist you with them. Banks and mortgage providers are always willing to sit down and talk over how a mortgage will work. They’re hoping you’ll choose them for the mortgage after all. Applying for a mortgage will depend on your credit rating and potential to pay it back. The better able you are to pay it back, the lower the interest rate you’ll get.
If you are struggling with figuring out your mortgage, you can also hire a mortgage broker. These people work for you. For a fee, they will work to find you the very best mortgage possible. While it may mean more money paid out initially, it will often end up in big savings in the long run!
